Establishment of commodities markets
4.—(1) No person may establish or maintain, assist in establishing or maintaining or hold the person out as providing or maintaining any commodity market unless the commodity market has been approved by the Board under section 5(2).
(2) As from 8 October 2018, subsection (1) ceases to apply in relation to any commodity market —(a)
that is established on or after that date; or
(b)
that was approved under subsection (1) before that date, to the extent that it relates to commodity forward contracts.[4/2017]
(3) A person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $30,000 or to imprisonment for a term not exceeding 3 years or to both.
Power of Board to approve commodity market
5.—(1) A body corporate may apply to the Board for approval as a commodity market in such form and manner as may be prescribed and the body corporate must, in connection with that application, provide such information as the Board may require.
(2) The Board may, in writing, approve a body corporate as a commodity market if it is satisfied that —(a)
the business rules of the body corporate make satisfactory provision for the matters referred to in section 6;
(b)
the interests of the public will be served by granting the application.
(3) The Board must not refuse to approve a body corporate as a commodity market under this section without giving the applicant an opportunity of being heard.
Business rules
6.—(1) The business rules of every body corporate which has applied for approval or which has been approved as a commodity market under section 5 must make satisfactory provision —(a)
for the exclusion from membership of persons who are not of good character and high business integrity;
(b)
for the expulsion, suspension or disciplining of members for conduct inconsistent with just and equitable principles in the transaction of business, or for a contravention of the business rules of the proposed commodity market;
(c)
with respect to the terms and conditions under which commodity contracts may be made;
(d)
with respect to the clearing and other arrangements made and the financial conditions of the commodity market, its clearing house and its members are such as to provide reasonable assurance that all obligations arising out of any contracts entered into on that commodity market will be met;
(e)
that trading practices are fair and properly supervised;
(f)
that adequate measures have been taken to prevent manipulation and excessive speculation;
(g)
that adequate provision has been made to record and publish details of trading;
(h)
with respect to the establishment of a Compensation Fund, or any other scheme or system accepted by the Board, which would compensate customers who suffer pecuniary loss through the defalcation of a member, or any of its directors or employees, in respect of any money or other property that was entrusted to or received by a member, or a director or an employee, for or on behalf of any person or by reason that the member was trustee of the money or other property; and
(i)
generally for carrying on the business of the proposed commodity market with due regard to the interests and protection of the public.
(2) The Board may, with the approval of the Minister, by regulations prescribe the manner, form and procedure for the making of business rules of a commodity market or clearing house and any amendment thereof; and those regulations may make provision for the Board to disallow the whole or part of any rule or any amendment thereto as it thinks fit.
Revocation of approval
7.—(1) The Board may revoke any approval granted under section 5 if —(a)
the body corporate ceases to operate as a commodity market;
(b)
the body corporate is being wound up;
(c)
the body corporate is operating in a manner detrimental to the public interest; or
(d)
any information provided to the Board under section 5(1) was false or misleading in a material particular.
(2) For the purposes of subsection (1)(a), a body corporate is deemed to have ceased to operate as a commodity market if it has ceased to operate for more than 30 days unless it has obtained the approval of the Board to do so, or unless it has ceased to operate by virtue of any direction issued by the Board under section 34(1)(a).
Establishment of clearing house
8.—(1) No person may establish, maintain or provide or assist in establishing, maintaining or providing, or hold the person out as maintaining or providing a clearing house for a commodity market unless the person is a body corporate approved as a clearing house under section 9.
(2) As from 8 October 2018, subsection (1) ceases to apply in relation to any clearing house —(a)
that is established on or after that date; or
(b)
that was approved under subsection (1) before that date, to the extent that it relates to commodity forward contracts.[4/2017]
(3) A person who contravenes subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $30,000 or to imprisonment for a term not exceeding 3 years or to both.
Power of Board to approve clearing house
9.—(1) A body corporate may apply to the Board for approval as a clearing house in such form and manner as may be prescribed and the body corporate must, in connection with that application, provide such information as the Board may require.
(2) The Board may in writing approve a body corporate as a clearing house if it is satisfied that —(a)
the business rules of the body corporate make satisfactory provision relating to the registration of, and guaranteeing to its members of the performance of, commodity contracts made in a commodity market; and
(b)
the interests of the public will be served by granting the application.
Appeal to Minister
10. A person who is aggrieved by the decision of the Board made under section 5, 7 or 9 may, within 30 days of the decision, appeal to the Minister whose decision is final.
Liabilities of commodity market and clearing house
11.—(1) A person, who is aggrieved by the failure of a commodity market or a clearing house or any of the directors or employees of the commodity market or clearing house to enforce its business rules or by the contravention of this Act or any regulations made under this Act in the enforcement of the business rules, has a right of action in damages for the actual amount of damages suffered by that person —(a)
in any transaction that the person has entered into on or subject to the business rules of a commodity market; and
(b)
that is directly attributable to the failure to enforce the business rules, or the contravention of this Act or any regulations made under this Act in the enforcement of the business rules.
(2) No action for damages shall lie against a commodity market or a clearing house, or any of its directors or employees under subsection (1) unless the aggrieved person can show that, in failing to take action or in taking such action as was taken resulting in loss to the aggrieved person, the commodity market or the clearing house, or any of the directors or employees, acted in bad faith.
(3) The right of action conferred by this section is the exclusive remedy available to any person who suffers loss as a result of an alleged failure of a commodity market or a clearing house, or any of its directors or employees, to enforce its business rules, or the contravention of this Act or any regulations made under this Act in the enforcement of the business rules.
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
